What is a Bull and Bear Market?
A is a period when prices are rising. A is a period when they are falling. These two terms come up constantly in financial news, and understanding them helps you make sense of what is happening around you without getting swept up in the emotion of the moment.
What counts as a bull or ?
The conventional definition of a is a decline of 20% or more from a recent peak. A is typically defined as a rise of 20% or more from a recent low. These are not official rules they are widely used conventions that give investors a shared language.
How long do they last?
tend to last longer than . Historically the average has lasted several years. tend to be shorter and sharper. They are painful while they happen, but they have always eventually given way to a new .
How should you behave in each?
In a the temptation is to take on more risk than you should, assuming prices will keep rising. In a the temptation is to sell everything and wait for things to improve. Both instincts tend to hurt long-term investors. The most reliable approach is to stay invested through both and keep contributing steadily.
Why does it matter?
Knowing whether you are in a bull or gives you context. It helps you understand why your is moving the way it is and whether what you are experiencing is normal. Markets have always cycled between periods of growth and decline. That has not changed and is unlikely to.